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Nov 27, 2014
This week's theme
Eponyms

This week's words
solon
mazarine
platonic
tontine

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A.Word.A.Day
with Anu Garg

tontine

PRONUNCIATION:
(TON-teen, ton-TEEN)

MEANING:
noun: A form of investment in which participants pool their money into a common fund and receive an annuity. Each person's share increases as members die until the last survivor takes the whole.

ETYMOLOGY:
From French tontine. Named after Lorenzo Tonti, a Neapolitan banker, who started the scheme in France. Earliest documented use: 1765.

NOTES:
A tontine was also used a way to raise money for the state, often for fighting wars, as the fund went to the crown after the last person died. Crown funding via crowdfunding. As there was a perverse incentive to hasten the demise of other members of a tontine to increase one's share, eventually it was made illegal. Tontine has been used as a plot device in many works of fiction.

USAGE:
"I am not saying that tontines should replace life annuities. Rather, they should be reintroduced and then coexist in the market."
Moshe A. Milevsky; Wealth Management; The Wall Street Journal (New York); Apr 22, 2013.

See more usage examples of tontine in Vocabulary.com's dictionary.

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